Brazil proposes sugar export tax to regulate ethanol production

By | June 01, 2002
The Brazilian government may ask its sugar and ethanol industry to accept a tax on sugar exports as a condition to reactivating the ethanol-powered car program, a minister said last month.

Trade and Industry Minister Sergio Amaral said the Brazilian government is disposed to reactivate the ethanol-powered car program, known as Proalcool, but added he first needed guarantees there would be no cane ethanol shortages before it takes the plunge. The government is worried millers will divert cane from ethanol-to-sugar production when international sugar prices rise. Amaral said the easiest way to prevent this was a tax on sugar exports, imposed when ethanol stocks are seen as precarious. Other officials said the government worries that eventual shortages of ethanol were unfounded and the tax is unnecessary, although the sector would consider the proposal.